Starting a business: sole trader, company and GST registration

Inland Revenue and Companies OfficeVerified 14 Oct 2026Official pages checked daily

The most common ways to run your own business in New Zealand are as a sole trader or through a company. Sole traders do not need to register with a government agency. You just tell Inland Revenue. To start a company, you register online with the Companies Office and pay a fee. You must register for GST once your turnover reaches NZ$60,000. If your end-of-year tax bill from your last return was more than NZ$5,000, you must also pay provisional tax in instalments.

Key facts

Do sole traders need to register?: No. You do not need to register yourself or your business with any government agency. You only need to tell Inland Revenue that you have started working for yourself.¹
What sole traders need: A personal IRD number (for income tax and GST), any government licences and permits your business needs, and any qualifications or registrations your industry requires.¹
NZBN for sole traders: Optional, but recommended.¹
Company name reservation fee: NZ$10 (plus GST)²
Company registration fee: NZ$118.74 (plus GST)²
Deadline to complete registration: Within 20 working days of reserving the name. This includes every director and shareholder returning their signed consent form.²
Company annual return: Once a year. The fee is NZ$49.74 (plus GST).²
Director residency requirement: Every New Zealand company must have at least 1 director who lives in New Zealand, or who lives in Australia and is a current director of a company registered in Australia.³
What counts as 'living in New Zealand': In general, the Registrar will accept that you live in New Zealand if you have spent more than 183 days in total in New Zealand within 12 months.³
Who cannot be a director (some examples): People under 18, undischarged bankrupts, and people who are banned from being a director or from taking part in managing a company.³
When you must register for GST: You carry out a taxable activity and your turnover was at least NZ$60,000 in the past 12 months, or you expect it to be at least NZ$60,000 in the next 12 months. You must also register if you have added GST to your prices.⁴
Voluntary GST registration: You can choose to register even if your turnover is below NZ$60,000.⁴
When you must pay provisional tax: If the end-of-year tax you had to pay on your last tax return was more than NZ$5,000, you must pay provisional tax in instalments the following year.⁵

Who is this for, and what are the requirements?

Sole trader: a business owned and run by one person. Many small businesses and contractors start as sole traders.
Company: registered (incorporated) with the Companies Office. A company can have just 1 shareholder or several.
Before you start a company, make sure at least 1 director meets the residency requirement. They must live in New Zealand, or live in Australia and be a director of an Australian company.
GST: only people or organisations that carry out a taxable activity need to think about GST. Starting a business, setting up a company or having an IRD number does not by itself mean you must register.
Provisional tax: this usually applies to people with income from self-employment, rental property, contracting, partnerships or overseas, whose end-of-year tax bill from the previous year was more than NZ$5,000.

How do I do it? Steps and process

Choose your business structure
The most common structures are sole trader, company and partnership. business.govt.nz has a free Choose Business Structure tool. Answer a few questions to see which one may suit you. If you are not sure, talk to an accountant or lawyer first.
Sole trader: tell Inland Revenue
If you do not have an IRD number, apply for one first. If you already have one, log in to myIR, click 'I want to…', choose 'Send a message', select the message category 'Other', use the title 'Notification to become a sole trader', and submit. If you do contract work, use form IR330C to declare your tax rate for schedular payments.
Sole trader: ACC and NZBN
Sole traders automatically get ACC CoverPlus accident cover. You need to set up a MyACC for Business account to pay your levies. Your first invoice only arrives after your first full year in business. An NZBN (New Zealand Business Number) is not required, but it is recommended. It makes dealing with government, suppliers and customers easier.
Company: set up your accounts and reserve a name
First get a RealMe login and a Companies Office online account. Check that the name you want is available and meets the rules. Then reserve the name. The fee is NZ$10 (plus GST). You must complete registration within 20 working days of reserving the name.
Company: apply for registration online
In your Companies Office account, find the 'Complete Coy Application' task. Fill in the director, shareholder and tax registration details. You can apply for the company's IRD number, GST number and employer registration at the same time. Pay the registration fee of NZ$118.74 (plus GST) and submit. The system then emails a consent form to each director and shareholder. Everyone must sign and return it within 20 working days. When all forms are received and the application is approved, you will get a Certificate of Incorporation.
Check whether you need to register for GST
You must register if your turnover was at least NZ$60,000 in the past 12 months, or you expect it to reach that in the next 12 months. You must also register if you have added GST to your prices. Below that amount, you can register voluntarily. When you register, you choose a filing frequency and an accounting basis.
What to do after you register for GST
Charge GST to your customers, file GST returns on time, pay any GST you owe to Inland Revenue, and keep GST records. In each return, work out the difference between the GST you collected and the GST you paid. If you collected more, you pay the difference. If you paid more, you get a GST refund.
Watch out for provisional tax
Your first year in business is not tax-free. If the end-of-year tax on your last return was more than NZ$5,000, you must pay provisional tax in instalments the following year. Inland Revenue offers 4 ways to calculate it. If you are not required to pay it but expect your end-of-year tax to be more than NZ$5,000, you can choose to become a provisional taxpayer.

What documents do I need?

Personal IRD number (sole traders use it for income tax and GST)
myIR account: to notify Inland Revenue, register for GST and file returns
RealMe login and Companies Office online account (to start a company)
Details of all directors and shareholders, and their signed consent forms
The company's registered office address, address for service, contact address and email
Form IR330C (for sole traders doing contract work and receiving schedular payments)
Any licences, permits and industry qualifications your business needs

What should I watch out for?

Being a sole trader is the simplest and cheapest option, but you are personally responsible for all the business's debts. A company is legally separate from its shareholders. If you may want to sell the business or bring in investors later, it is best to use a company from the start. You can start as a sole trader and set up a company later.
Sole traders can get some support, such as paid parental leave, but do not get employee benefits like paid sick leave.
Starting a business, setting up a company or having an IRD number does not mean you must register for GST. What matters is your turnover. If you register voluntarily below NZ$60,000, you can claim back the GST on your business expenses. The downside is that you must add GST to your prices and file regular returns, and late filing can lead to penalties.
If you are already charging GST but have not registered, contact Inland Revenue now. In special cases, Inland Revenue can backdate your GST registration.
The director residency rule is strict. If none of the directors live in New Zealand (and none meet the Australian exception), the company cannot be registered. If you are unsure, the Companies Office recommends getting legal advice before you start registering.
A company annual return is not a tax return. It confirms that the company is still operating and that its registered details are correct. If you do not file it on time, the Registrar may remove the company from the register.
Your first year in business is not tax-free. If you choose to pay tax early, you may get an early payment discount.
This page only summarises publicly available official information. It is not legal, tax or immigration advice. For choosing a structure or working out your tax, it is best to see an accountant or tax agent.

Common questions

Where do I register as a sole trader in New Zealand?

You do not need to register as a sole trader with any government agency. You only need to tell Inland Revenue that you have started working for yourself. If you have an IRD number, log in to myIR, choose 'Send a message', select the category 'Other' and use the title 'Notification to become a sole trader'. If you do not have an IRD number, apply for one first.

How much does it cost to register a company in NZ, and how do I do it?

It costs NZ$10 (plus GST) to reserve a company name and NZ$118.74 (plus GST) to register the company. You register online with the Companies Office, using a RealMe login and a Companies Office online account. You must complete registration within 20 working days of reserving the name. This includes every director and shareholder returning their signed consent form.

At what turnover do I have to register for GST?

You must register for GST once your turnover reaches NZ$60,000. This applies if your turnover was at least NZ$60,000 in the past 12 months, or you expect it to be at least NZ$60,000 in the next 12 months. You must also register if you have added GST to your prices.

My business earns less than NZ$60,000. Can I register for GST voluntarily?

Yes, you can choose to register for GST even if your turnover is below NZ$60,000. If you register, you can claim back the GST on your business expenses. However, you must add GST to your prices and file regular returns. Late filing can lead to penalties.

I don't live in New Zealand. Can I be the only director of an NZ company?

Usually no. Every New Zealand company must have at least 1 director who lives in New Zealand. The only exception is a director who lives in Australia and is a current director of a company registered in Australia. In general, living in New Zealand means spending more than 183 days in total in New Zealand within 12 months. If you are unsure, the Companies Office recommends getting legal advice before you start registering.

What is provisional tax, and do I pay it in my first year?

Provisional tax means paying your income tax in instalments during the year. You must pay it if the end-of-year tax on your last tax return was more than NZ$5,000. You then pay it in instalments the following year. Your first year in business is not tax-free. If you are not required to pay provisional tax but expect your end-of-year tax to be more than NZ$5,000, you can choose to become a provisional taxpayer.

What is an NZBN, and do sole traders need one?

An NZBN is a New Zealand Business Number. Sole traders do not need one, but it is recommended. It makes dealing with government, suppliers and customers easier.

Is it better to be a sole trader or start a company in NZ?

It depends on your situation. Being a sole trader is the simplest and cheapest option, but you are personally responsible for all the business's debts. A company is legally separate from its shareholders. A company is best if you may want to sell the business or bring in investors later. You can try the free Choose Business Structure tool on business.govt.nz, or talk to an accountant or lawyer.

Answers are based on the verified content of this page — the official source always prevails.

Where can I check the official information?

Becoming a sole traderBusiness.govt.nz (MBIE) · business.govt.nz
Incorporating a companyCompanies Office · companies-register.companiesoffice.govt.nz
Who can be a directorCompanies Office · companies-register.companiesoffice.govt.nz
Registering for GSTInland Revenue · ird.govt.nz
Provisional taxInland Revenue · ird.govt.nz

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The AI answers using this guide and official New Zealand government websites.

Annual leave, sick leave and public holidays

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Work disputes and unpaid wages

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